Costco Wholesale Corporation Reports Second Quarter And Year-To-Date Operating Results For Fiscal 2023 And February Sales Results

Costco Wholesale Corporation Reports Second Quarter And Year-To-Date Operating Results For Fiscal 2023 And February Sales Results

Written by Customer Service on . Posted in Earnings Releases And Operating Results.

ISSAQUAH, Wash., March 02, 2023 (GLOBE NEWSWIRE) — Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the second quarter (twelve weeks) and the first 24 weeks of fiscal 2023, ended February 12, 2023.

Net sales for the quarter increased 6.5 percent, to $54.24 billion, from $50.94 billion last year. Net sales for the first 24 weeks increased 7.3 percent, to $107.68 billion, from $100.35 billion last year.

Comparable sales for the second quarter and first 24 weeks of fiscal 2023 were as follows:

    12 Weeks   12 Weeks   24 Weeks   24 Weeks  
        Adjusted*       Adjusted*  
  U.S. 5.7%   5.8%   7.5%   6.2%  
  Canada 3.5%   9.6%   2.9%   8.9%  
  Other International 3.8%   9.5%   0.4%   9.3%  
                   
  Total Company 5.2%   6.8%   5.9%   7.0%  
                   
  E-commerce -9.6%   -8.7%   -6.8%   -5.5%  

*Excluding the impacts from changes in gasoline prices and foreign exchange.

Net income for the quarter was $1,466 million, $3.30 per diluted share. Last year’s second quarter net income was $1,299 million, $2.92 per diluted share. Net income for the first 24 weeks was $2.83 billion, or $6.37 per diluted share, compared to $2.62 billion, $5.90 per diluted share, last year.

For the four-week reporting month of February, ended February 26, 2023, the Company reported net sales of $17.06 billion, an increase of 4.7 percent from $16.29 billion last year. Lunar New Year/Chinese New Year occurred on January 22, 10 days earlier this year. The shift positively impacted February’s Other International and Total Company sales by approximately 2% and 0.25%, respectively. For the twenty-six week period ended February 26, 2023, net sales were $116.06 billion, an increase of 7.1 percent from $108.39 billion last year.

Comparable sales for the February and year-to-date periods ended February 26, 2023, were as follows:

    4 Weeks   4 Weeks   26 Weeks   26 Weeks  
        Adjusted*       Adjusted*  
  U.S. 3.4%   3.5%   7.1%   6.0%  
  Canada 1.2%   7.3%   2.7%   8.8%  
  Other International 6.5%   11.5%   0.7%   9.4%  
                   
  Total Company 3.5%   5.0%   5.6%   6.8%  
                   
  E-commerce -11.2%   -10.3%   -7.0%   -5.7%  

*Excluding the impacts from changes in gasoline prices and foreign exchange.

Costco currently operates 848 warehouses, including 584 in the United States and Puerto Rico, 107 in Canada, 40 in Mexico, 31 in Japan, 29 in the United Kingdom, 18 in Korea, 14 in Taiwan, 14 in Australia, four in Spain, two each in France and China, and one each in Iceland, New Zealand and Sweden. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia.

A conference call to discuss these results is scheduled for 2:00 p.m. (PT) today, March 2, 2023, and is available via a webcast on investor.costco.com (click on “Events & Presentations”).

Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For these purposes, forward-looking statements are statements that address activities, events, conditions or developments that the Company expects or anticipates may occur in the future. In some cases forward-looking statements can be identified because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms. Such forward-looking statements involve risks and uncertainties that may cause actual events, results or performance to differ materially from those indicated by such statements. These risks and uncertainties include, but are not limited to, domestic and international economic conditions, including exchange rates, inflation or deflation, the effects of competition and regulation, uncertainties in the financial markets, consumer and small business spending patterns and debt levels, breaches of security or privacy of member or business information, conditions affecting the acquisition, development, ownership or use of real estate, capital spending, actions of vendors, rising costs associated with employees (generally including health-care costs), energy and certain commodities, geopolitical conditions (including tariffs and the Ukraine conflict), the ability to maintain effective internal control over financial reporting, regulatory and other impacts related to climate change, public-health related factors, and other risks identified from time to time in the Company’s public statements and reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made, and the Company does not undertake to update these statements, except as required by law.

CONTACTS: Costco Wholesale Corporation
  Richard Galanti, 425/313-8203
  David Sherwood, 425/313-8239
  Josh Dahmen, 425/313-8254

COST-Earn
COST-Sales

COSTCO WHOLESALE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(unaudited)

  12 Weeks Ended   24 Weeks Ended
  February 12,
2023		   February 13,
2022		   February 12,
2023		   February 13,
2022
REVENUE              
Net sales $ 54,239     $ 50,937     $ 107,676     $ 100,354  
Membership fees   1,027       967       2,027       1,913  
Total revenue   55,266       51,904       109,703       102,267  
OPERATING EXPENSES              
Merchandise costs   48,423       45,517       96,192       89,469  
Selling, general and administrative   4,940       4,575       9,857       9,293  
Operating income   1,903       1,812       3,654       3,505  
OTHER INCOME (EXPENSE)              
Interest expense   (34 )     (36 )     (68 )     (75 )
Interest income and other, net   114       25       167       67  
INCOME BEFORE INCOME TAXES   1,983       1,801       3,753       3,497  
Provision for income taxes   517       481       923       832  
Net income including noncontrolling interests   1,466       1,320       2,830       2,665  
Net income attributable to noncontrolling interests   —       (21 )     —       (42 )
NET INCOME ATTRIBUTABLE TO COSTCO $ 1,466     $ 1,299     $ 2,830     $ 2,623  
               
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:              
Basic $ 3.30     $ 2.93     $ 6.37     $ 5.91  
Diluted $ 3.30     $ 2.92     $ 6.37     $ 5.90  
               
Shares used in calculation (000s):              
Basic   443,877       443,623       443,857       443,500  
Diluted   444,475       444,916       444,503       444,760  
               
               
               

COSTCO WHOLESALE CORPORATION
CONSOLIDATED BALANCE SHEETS
(amounts in millions, except par value and share data)
(unaudited)

Subject to Reclassification

      February 12, 2023   August 28, 2022
ASSETS      
CURRENT ASSETS      
Cash and cash equivalents $ 12,970     $ 10,203  
Short-term investments   735       846  
Receivables, net   2,714       2,241  
Merchandise inventories   16,081       17,907  
Other current assets   1,830       1,499  
Total current assets   34,330       32,696  
OTHER ASSETS      
Property and equipment, net   25,724       24,646  
Operating lease right-of-use assets   2,859       2,774  
Other long-term assets   3,935       4,050  
TOTAL ASSETS $ 66,848     $ 64,166  
LIABILITIES AND EQUITY      
CURRENT LIABILITIES      
Accounts payable $ 16,407     $ 17,848  
Accrued salaries and benefits   4,483       4,381  
Accrued member rewards   2,016       1,911  
Deferred membership fees   2,412       2,174  
Current portion of long-term debt   76       73  
Other current liabilities   7,122       5,611  
Total current liabilities   32,516       31,998  
OTHER LIABILITIES      
Long-term debt, excluding current portion   6,506       6,484  
Long-term operating lease liabilities   2,557       2,482  
Other long-term liabilities   2,470       2,555  
TOTAL LIABILITIES   44,049       43,519  
COMMITMENTS AND CONTINGENCIES      
EQUITY      
Preferred stock $0.005 par value; 100,000,000 shares authorized; no shares issued and outstanding   —       —  
Common stock $0.005 par value; 900,000,000 shares authorized; 443,550,000 and 442,664,000 shares issued and outstanding   2       2  
Additional paid-in capital   7,123       6,884  
Accumulated other comprehensive loss   (1,672 )     (1,829 )
Retained earnings   17,341       15,585  
Total Costco stockholders’ equity   22,794       20,642  
Noncontrolling interests   5       5  
TOTAL EQUITY           22,799       20,647  
TOTAL LIABILITIES AND EQUITY         $ 66,848     $ 64,166  

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